Business Foreign Investors Sceptical About Nigeria's Eurobond, Seeks Yield Above 7%

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Foreign investors are seeking interest rate (yield) above seven per cent from the federal government’s international road show on the upcoming $1 billion Eurobond.

Finance Minister Kemi Adeosun, Central Bank Governor Godwin Emefiele and other senior government officials have been meeting investors Since first week of February in London and the United States on a road-show to issue the bond with a 15-year maturity

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According to Vanguard, among other things, investors that attended the London-leg of the road-show held on February 3rd and February 6th, expressed concerns over the Naira exchange rate and the nation’s crude oil output.

A source with knowledge of the investor meetings, organised by Citigroup and Standard Chartered Bank told Vanguard that oil production and currency were the two main issues investors were considering in pricing the bond.

Investors also asked about the continuity of government policies in the absence of President Muhammadu Buhari, who is in Britain on medical leave.

“The real concern is oil production and foreign exchange. Will there be a further devaluation this year?” the source said, adding that investors queuing for the dollar bond were looking at a potential yield above 7 percent.
 
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